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MF Article - BIG Shareholders go guarantor for revenue growth. Is it sustainable?, page-131

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Lumpy Pom

307 Posts.

11/02/18

21:40

Post #: 30981178
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Originally posted by paulgf ↑

I totally agree with this post . There needs to be far greater information to the market around how many customers were taking up the product because of the access to cheap finance and better information around customer retention rates particularly those in the cheap finance . The company makes a big thing about the not for profit sector . The not for profit sector often has limited funds and would need financing vehicles like this to afford to pay for the product .

My concern is that the whole share issue business for financing new customers is part of an orchestrated attempt to drive customer growth early on but with no care for excessive shareholder dilution in the hope that the market has its eyes on other metrics to value this company while its losing money . I am amazed at the amount of people on here who say it's making money , well no it's not , based on its last financials . Management knows full well that start up tech customers are often priced based on revenue growth and burn rates of cash and this deal attempts to address both of these , that's fine that is good management to a point , but the market needs to know the details of these deals so it can price the stock accordingly . The details have not been revealed .

I am playing devils advocate here but how do we know that customers are not getting very favourable terms like , try it for 12 months , you don't like it fine , don't renew , our bill has been covered by the Financier ? That might not be true but the lack of details leaves one guessing at various possibilities .

Go and read the latest published full year financials , it's very hard to decipher how profitable each transaction / customer is and how future revenue growth will drive profit not cashflow or some other metric but profit and earnings per share growth. You will note they always are referring to customer receipts not earnings , very ironic given this type of arrangement . Arrangements like this cloud the ability of the market to project earnings per share and eps ultimately is how a share is priced not cash receipts which they keep banging on about . The market needs to know more and managements if it stays silent on this , now this arrangement is fully in the public , it is being negligent . It's that simple .

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Suggest you and sojourner read post 30980605 from Which provides a few actual facts, and references information provided by the company ( including AGM papers provided to shareholders).

Speculation, inference and absence of material fact about the basis of the issuance of shares has been available from the AFR

Lumpy

BIG Price at posting: $1.60 Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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